| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 57.11 | 128 |
| Intrinsic value (DCF) | 10.60 | -58 |
| Graham-Dodd Method | 8.10 | -68 |
| Graham Formula | 2.49 | -90 |
Jiujiang Shanshui Technology Co., Ltd. is a specialized chemical manufacturer headquartered in Jiujiang, China, focusing on the production of high-value intermediates for the dye, pesticide, and pharmaceutical industries. Founded in 2012 and listed on the Shenzhen Stock Exchange, the company has established itself as a key player in China's chemical sector through its portfolio of critical compounds including 6-nitro-1,2-diazooxynaphthalene-4-sulfonic acid, pyrazole acid, and various aminophenol derivatives. Operating within the Basic Materials sector and Specialty Chemicals industry, Jiujiang Shanshui leverages its technical expertise in organic synthesis to serve downstream manufacturers requiring precise chemical building blocks. The company's strategic positioning in China's robust chemical manufacturing ecosystem allows it to benefit from regional supply chain advantages while catering to both domestic and international markets. With a market capitalization of approximately CNY 6.24 billion, Jiujiang Shanshui represents a specialized investment opportunity in the chemical intermediates space, particularly for investors seeking exposure to China's industrial chemical value chain.
Jiujiang Shanshui Technology presents a mixed investment profile with several notable strengths and concerns. The company demonstrates profitability with net income of CNY 53 million and diluted EPS of CNY 0.25, supported by a strong balance sheet featuring substantial cash reserves of CNY 1.06 billion against modest total debt of CNY 50.9 million. The dividend payment of CNY 0.15 per share indicates shareholder-friendly capital allocation. However, significant red flags include negative operating cash flow of CNY -77.3 million despite positive net income, suggesting potential working capital challenges or receivables issues. The company's beta of 0.69 indicates lower volatility than the broader market, which may appeal to risk-averse investors, but the cash flow concerns warrant careful monitoring. Investors should weigh the company's niche market positioning and financial stability against the operational cash flow deterioration when considering investment suitability.
Jiujiang Shanshui Technology competes in the highly fragmented Chinese specialty chemicals intermediate market, where competitive advantage is derived from technical expertise, production scale, and customer relationships. The company's focus on specific dye, pesticide, and pharmaceutical intermediates provides some insulation from broader chemical commodity cycles, but it faces intense competition from numerous domestic producers. Its competitive positioning appears moderately strong within its niche product segments, particularly in pyrazole acid and aminophenol derivatives where it has established production capabilities. However, the negative operating cash flow raises questions about the sustainability of its business model and competitive moat. The company's relatively small revenue base of CNY 505 million suggests it operates as a mid-tier player rather than a market leader, potentially limiting pricing power and economies of scale. Its technological capabilities in organic synthesis provide some differentiation, but the specialty chemical intermediate sector typically features low barriers to entry for basic compounds, exposing the company to price competition. The substantial cash position provides financial flexibility for potential expansion or R&D investments, but the current cash flow challenges may constrain strategic initiatives. Overall, Jiujiang Shanshui's competitive position appears adequate within its specific product categories but lacks the scale and financial performance indicators of established market leaders.